Heineken is one of the top brewery companies of the world. Its headquarter is located in Amsterdam, Netherlands. It offers more than 175 brands in more than 100 countries around the world. The company has equally spread in Europe, America, Asia and Africa. Its strategy to enter new global markets was through mergers and acquisitions. The company has strengthened its position and become the third leading brewer brand around the globe. A 22-years old Gerard Adriaan Heineken founded this company in 1864 in Amsterdam. Its shares are traded on NYSE, OTCQX, and Euronext Amsterdam. 50% of the total shares are owned by the Heineken family. In the brewery industry, Heineken is the leading and fast-growing company.
The company appointed Jeanne Francois as CEO in 2005; the CEO was the non-Dutch CEO of the company. He replaced Thorny Ruys, who resigned because he failed to improve the performance of the company. To compete with its close competitors the new CEO of the company has adopted the policy of mergers, partnerships, and alliances to spread its access to global markets.
The company’s mission is to delight its customers with great quality and remarkable brand experiences. “We delight consumers, day in and day out, with perfect cider and beer brand experiences”. The vision of the company is about the passion for improving quality to delight its customers. “We have a passion for quality and bringing enjoyment to life, whilst respecting individuals, society and the planet.”
Strengths of Heineken
The company has a strong brand portfolio; it offers more than 170 products around the world.
The company is highly profitable, and some of the brands are the best-selling in the market.
The management and employees are highly skilled and competent. The customer satisfaction level is higher among the present brands.
Weaknesses of Heineken
The company needs more investment to acquire the latest technology to compete with its competitors. The company is spending lesser funds on research and development as compared to other top players in the industry.
In emerging market economies, Heineken has more opportunities because of an increase in customer spending. There are opportunities to capture new customers and boost its market shares.
Threats for Heineken
The company operates in around 100 countries, so the political, economic, and environmental situations and rapid changes could affect the profit of the company. The innovation and product development process of the company is slow. The company has increased its product line through mergers and acquisitions. It could harm the company in the long run.
Porters 5 forces of Heineken
There are many multinational and local brands in every market around the world. There are some strong market players in the industry that maintain their power within the industry. In competitive rivalry analysis, we analyse the strengths and weaknesses of our competitors to reshape our strategies.
Threats of new entrants
In an open market, there is always a threat of new entrants. For global brands, entry to a new market is easy. There are some barriers for new entrants. These barriers could be both legal and industrial.
Threats of substitute
The threat of substitutes also decreases profitability and limits the profit of a brand by placing a price ceiling. The fear of being substituted by other brands and products affects the potential growth of the company.
Bargaining power of suppliers
The suppliers of raw materials for the company are mostly farmers. So the threats of the power of suppliers are relatively higher. The bottle supplier is Heye Glas in the Netherlands which is the only supplier of green bottles to the brewery industry.
Bargaining power of customers
In this industry, there are many choices as there are many brands available in the market. The higher number of choices increases the bargaining power of customers and reduces the profit of the company.
The environment of the company is highly competitive and cooperative. The company is focused on enhancing the skills of its workforce for sustainable growth.
The company needs to spend more budget on research and development. The company should improve its technology.
The mission of the company is to provide high-quality products to its customers. So the company needs to spend more money and energy on innovation and product development.